Don't be surprised if your local Mickey D's is a little more crowded than usual in the coming weeks. McDonald's (NYSE:MCD) kicked off its Monopoly promotion on Tuesday.
Hooking up with Hasbro (NASDAQ:HAS) to transform the toy giant's popular Monopoly board game into a dining promotion has been a tradition since 1987. Patrons receive game stamps on the packaging of select sandwiches, sides, and beverages. Many prizes offer instant prizes, but the real draw for McDonald's is the allure of matching property sets to score even bigger giveaways.
Collect both Boardwalk and Park Place and you can walk away $1 million richer, before taxes, of course. Grab all three of the green properties and you'll be off on a private Cessna jet trip. From a $5,000 shopping trip for snagging the four railroad stamps to $10,000 for scoring the two utility properties, there are plenty of ways to win -- and plenty of reasons to return to McDonald's. The four-week promotion ends on Oct. 27.
Rich Uncle Pennybags timely arrival
The marketing stunt comes at a hungry time for McDonald's. Sales have been slumping, and the stock hit a 52-week low in early September.
When comparable sales slipped 2.8% for U.S. locations in August it wasn't a surprise. Comps have posted year-over-year declines in nine of the past 10 months. There's no shortage of problems at McDonald's, but for anyone that's been sleeping under a McRock for the past couple of years, here's a quick refresher on everything that's working against the world's largest burger flipper.
- Activists are calling out McDonald's for its low wages. It's a divisive issue, but being at the heart of the debate isn't helping the chain's brand image.
- Quality is an issue. Earlier this year Consumer Reports surveyed more than 32,000 fast food fans on leading chains based on their taste. McDonald's ranked dead last among 21 leading burger concepts.
- McDonald's warned franchisees last year that complaints are on the rise when it comes to employee unfriendliness. In possibly related note, industry trade mag QSR finds that drive-thru wait times are increasing, and a likely cause for lengthy waits and unhappy customers could be the expanding menu.
This leaves McDonald's struggling for customers at a time when many of its rivals are holding their own. If it has to use a gimmick to drum up traffic -- and a gimmick that dates back to the chain's glory days -- it's hard to fault the fast food bellwether for doing exactly that.
At the very least it should help deliver the eatery's first uptick in monthly comps in nearly a year. The only month that hasn't been a sinker since October of last year was a flat April, assisted by the calendar shift of the Easter holiday.
October should be a decent month for McDonald's, largely because we're not eyeing an apples-to-apples comparison. It has historically run the McDonald's promotion in late September through late October, but last year -- perhaps in a sign of desperation -- Monopoly kicked in during the summer. In other words, it's not as if the chain is pitted against the same promotion last October.
Investors are naturally hoping that this does the trick. Then again, giving the month, maybe the word "trick" isn't the best choice here. Things will get pretty scary -- and exec heads may start to roll -- if October proves to be more trick than treat.
Rick Munarriz has no position in any stocks mentioned. The Motley Fool recommends Hasbro and McDonald's. The Motley Fool owns shares of Hasbro. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.